You can NOT positive cash flow on a 2 family in Rhode Island!!!

[Matt Romano]

That is, while house hacking.  At least in the areas that I've been searching for multis. Excuse the controversial subject title, but, I needed this post to stand out a bit :)  So....

I've been searching for a property to house hack over the past few months. My criteria has been a multifamily, under $300k, in the Bristol / Warren area of RI.  (but was open to close surrounding towns, like East Providence, Portsmouth and Tiverton). I viewed a 2 family today in Warren that seems like a prime candidate, and I would love for you fellow BP pros to chime in with your thoughts.  First and foremost, relating back to my title, I've come to the conclusion that its really not likely in this area, in this market, to purchase a 2 family and cash flow positively WHILE owner occupying. A 3 family typically can be much closer to doing so, (but still may only break even after all expenses), whilst the 4 units can almost always indefinitely make you (some) money while you live.  However, the 4 unit properties are out of my price range in the areas I'm looking, and I'm not looking to sacrifice to a lower income area just because the numbers might seems more favorable. So I will start from here, which I'm ok with!

The property is listed for $240,000, and its a 3 bed 1 bath on the first floor and a 1/1 on the second unit (upstairs where I would occupy). Current Rents are $1150 downstairs, $675 upstairs, and property has a 3 car garage in which 2 bays rent for $125/mo. So total gross income is $1950 (in terms of investment property), or $1275 (minusing the 675 while I occupy the small upstairs unit). I would do conventional financing and put 20% in to avoid PMI, and borrow $192k. Mortgage payment would be between $1300-$1400/mo (depending on true tax and insurance numbers). Owner is responsible for gas as its not separately metered, and water. Electric however IS separate. SO I need to keep those expenses in mind. I've run the numbers in the rental property calculator here, and it's not a HUGE money maker in terms of cash flow, honestly its quite minimal. And could even dip negative if there were property management (wouldn't do anytime soon, just perspectively speaking) A few reasons why I really think this is an awesome opportunity despite the numbers not being anything impressive.

1. It's so close to my current residence, legit could run there in 4 mins, or bike in 2. And its a great location.  

2. The property is seems very well maintained. Had a roof done 4 years ago.  New windows throughout, new vinyl siding (including the garage), new water heater, landscaping is very well kept.  And you can even tell that the current tenants (downstairs specifically) really take care of it and treat it like a home to them. 

3. There's definitely room for forced appreciation if bathrooms were remodeled and minor kitchen updates. So definitely potential for higher rents

4. I need to make a move and start my real estate career!!!

Anyway, this post is already super long.  Basically just wanted to hear the thoughts of anyone whose willing to chime in! I'm seeing another 3 family tomorrow in Bristol, so I'll have another property to compare it too, but I have a really good feeling about this one. 

PS: maybe a topic for a different day, YOUR thoughts on putting 20% down and being in a much more advantageous position in terms of equity, VS putting as low down as possible (like FHA) but having a much great ROI.